- Southwestern Electric Power Company (SWEPCO) v. Committee of Certain Members of Cajun Electric (In re Cajun Electric Power Cooperative, Incorporated), No. 11-31022 2012 U.S. App. Lexis 13081 (5th Cir. 2012).
- Fifth Circuit interpreted parties' 1997 agreement to preclude either party's entitlement to reimbursement from the other due to the plain meaning of the relevant terms in the agreement.
- Procedural context:
- SWEPCO appeals the Bankruptcy and District Courts' rulings in favor of the CCM granting it fees under a 1997 agreement between the parties.
- In 1997, creditor SWEPCO and an informal committee ("CCM") signed a term sheet ("the 97 Agreement") whereby SWEPCO agreed to reimburse certain expenses incurred by the CCM during the Cajun Electric Chapter 11 confirmation process (SWEPCO had already paid $1mm of CCM's legal expenses prior to the 97 Agreement). However, the 97 Agreement also provided that SWEPCO had no such liability in the event that the joint SWEPCO-CCM Plan was not confirmed or another plan was confirmed. Another plan was confirmed in 1999. In June of 2001 the CCM sued SWEPCO arguing entitlement to reimbursement of legal expenses under the 97 Agreement. SWEPCO, in turn, sought repayment of the $1mm in legal fees that it provided the CCM prior to the agreement. The Bankruptcy and District Courts ruled in favor of the CCM on a portion of its claim (the portion of fees it incurred between execution of the 97 Agreement and termination of its entitlement to such expenses upon confirmation of the competing plan) and ruled against SWEPCO on its counterclaim. The Fifth Circuit reversed the lower Courts as to the CCM claim, interpreting the relevant language of the 97 Agreement, that "SWEPCO and the [CCM] shall have no obligation or liability to each other or any other party pursuant to this term sheet or the Joint Plan in the event that . . . the Bankruptcy Court confirms another plan" as precluding CCM's entitlement to such reimbursement including costs incurred prior to the occurrence of the terminating event. As to SWEPCO's claim, the Court agreed with the lower courts that SWEPCO was not entitled to reimbursement from the CCM because the CCM did not receive complete reimbursement (it was reimbursed $9mm out of $12.9mm in fees) "under another confirmed plan," thereby obviating its alleged obligation to SWEPCO.
- Before JOLLY, DeMOSS, and STEWART, Circuit Judges. PER CURIAM
In re: DIANN MARIE CATES
Summarizing by Lars Fuller
3320 in the system
9 Being Processed